What are the different types of commercial spaces and their benefits of investing?

November 17, 2019

Commercial spaces are the spaces that are used for business activities and these properties have the potential to generate profit through capital gain or rental income. There are many types of commercial properties all over India that are home to many business organizations. The designation of a property as a commercial property has implications on the financing of the building, the tax treatment, and the laws that apply to it.

Malls, grocery stores, office buildings, manufacturing shops, etc. all are a part of commercial property. The performance of the commercial property is often used as a measure for business activity in a given region or economy.

There are many types of commercial spaces. Some of them are as follows:

Office– Office buildings are of two types- urban or suburban. As the name suggests urban office buildings are found in cities and include skyscrapers and high-rise properties. Suburban office buildings are smaller in stature and are grouped in office parks. Office buildings can be both multi-tenanted and single-tenanted.

Retail– Retail comprises the properties that house the retailers and restaurants and they can be multi-tenanted or single-use standalone buildings. Regional malls, community centers, shopping stores, etc. are all part of the retail.

Hotel– Hotels are also a part of commercial spaces and this sector includes establishments that provide accommodations, meals, and other services to the tourists.

Industrial buildings– These commercial spaces allow space for industrial operations for a variety of tenants and are mostly located outside of urban areas. These areas can be used as wholesale warehouses, distribution centers, and repositories.

Multifamily– The multifamily sector of the commercial property covers all types of residential real estate outside of single-family that may include high-rise apartment buildings or apartment complexes.

Investing in commercial vs. residential property

If you are deciding to invest in a property then you must choose the commercial property because it has traditionally been seen as a sound investment. The initial costs of investment of the building and the costs associated with customization for tenants are much higher than residential real estate, but the overall returns are also higher.

Commercial property investors can also utilize the triple net lease, where the risks are passed on to the leasing business to a level that is not available to residential real estate investors. Apart from that, commercial property tends to have more straightforward pricing considerations. If you choose a residential property then you might have to look at a number of factors, including the emotional appeal of a property to prospective tenants. Whereas if you invest in commercial properties then you will have an income statement that shows the value of the current leases, which can then be compared to the capitalization rate for other commercial property opportunities that are available in the area.

If you are looking for a commercial space then the commercial spaces in Jaipur are the best options for you. The R Tech Group is offering commercial space for sale in Jaipur and you can invest in those spaces as R Tech Group is a prominent name in the real estate industry.